Question No 40 Chapter No 15 – USHA Publication 11 Class

Question No 40 Chapter No 15

Question No 40 Chapter No 15

Renewal of Bill

40. Q drew a bill of exchange on P for Rs 4,000 on 1st May 2018 for 3 months. P returned the bill to Q after acceptance it. Q discounted the bill at his bank for Rs 3,900. Just before the due date, P approached Q for the renewal of the bill. Q agreed on condition that Rs 1,000 plus interest on the balance at 6% per annum for 3 months be paid in cash immediately and a new bill for 3 months be drawn for the remaining balance. These condition were carried rupee in full settlement
Give journal entries in the book of P and Q

The solution of Question No 40 Chapter No 15: –

 

In the book of P (Drawee)
Date   Particulars
L.F. Debit Credit
2018          
May.1 Q A/c Dr.   4,000  
  To Bill payable A/c       4,000
  (Being acceptance given for three months.)        
           
Aug.1 Bill payable A/c Dr.   4,000  
  To Q A/c       4,000
  (Being cancellation of the old bill.)        
           
Aug.4 Q A/c Dr.   1,000  
  Interest A/c Dr.   45  
  To Cash A/c       1,045
  (Being part of payment made along with the interest.)        
           
Aug.4 Q A/c Dr.   3,000  
  To Bill Payable A/c       3,000
  (Being new bill acceptance for the balance for 3 months.)        
           
Nov.7 Bill Payable A/c Dr.   3,000  
  To Q A/c       3,000
  (Being bill dishonoured on Maturity.)        
           
Oct.7 Q A/c Dr.   3,000  
  To Cash A/c       1,200
  To Deficiency A/c       1,800
  (Being payment of a dividend of 40 paise full satisfaction.)        
         

 

In the book of Q (Drawer)
Date   Particulars
L.F. Debit Credit
2018          
May.1 Bill Receivable A/c Dr.   4,000  
  To P A/c       4,000
  (Being receipt acceptance given for three months.)        
           
May.1 Bank A/c Dr.   3,900  
  Discount A/c Dr.   100  
  To Bill Receivable A/c       4,000
  (Being receipt of an acceptance for one month.)        
           
Aug.4 Cash A/c Dr.   1,000  
  To P A/c       1,000
  To Interest A/c       45
  (Being part payment received with interest.)        
           
Aug.4 Bill Receivable A/c Dr.   3,000  
  To P A/c       3,000
  (Being receipt of new bill for the balance amount for 3 months.)        
           
Nov.7 P A/c Dr.   3,000  
  To Bill Receivable A/c       3,000
  (Being dishonor of the bill due to P’s insolvency.)        
           
Nov.7 Cash A/c Dr.   1,200  
  Bad Debts A/c Dr.   1,800  
  To P A/c       3,000
  (Being the receipt of a dividend of 40 paise in the rupee in the full satisfaction of our claim against P for Rs 3,000.)        
         

 

Bills Receivable Book | Subsidiary Books | Examples

 

Bills Payable Book | Subsidiary Books | Examples

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Also, Check out the solved question of all Chapters: –

 

Usha Publication – Elements of Book-Keeping PSEB (Class 11) – Solution

Chapter No. 1 – Introduction

Chapter No. 2 – Theory Base of Accounting 

Chapter No. 3 – Origin of Transactions

Chapter No. 4 – Vouchers and transactions

Chapter No. 5 – Journal

Chapter No. 6 – Accounting for Goods and Services Tax(GST)

Chapter No. 7 – Ledger

Chapter No. 8 – Cash Book

Chapter No. 9 – Other Subsidiary Books

Chapter No. 10 – Journal Proper

Chapter No. 11 – Trial Balance

Chapter No. 12 – Bank Reconciliation Statement

Chapter No. 13 – Depreciation

Chapter No. 14 – Provisions and Reserves 

Chapter No. 15 – Bills of Exchange

Chapter No. 16 – Rectification of Errors 

Chapter No. 17 – Financial Statements – (Without Adjustments)

Chapter No. 18 – Financial Statements – (With Adjustments)

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